November 7, 2012

AT&T To Pay FCC $70,000 Fine For Moving Customers To Monthly Plans

In the early days of cellular data, pre-iPhone, it´s likely most people, carriers included, thought the idea of consuming data on a cell phone would never catch on. Carriers were still charging a small premium for the privilege, of course, but had no problems bringing in these customers with an unlimited data plan. We all know what happened next: Customers began to demand more data, sending carriers to back pedal on their promises of unlimited or relatively cheap data. To this day, customers go out of their way to defend their grandfathered plans, despite the carriers best efforts to move them away from these attractive plans. One company, AT&T, has tried all sorts of methods in order to switch these customers over, from trying to entice subscribers with new plans to enforcing new policies.

For instance, in 2009, Big Blue began enforcing a policy which required all new subscribers and those subscribers who updated their devices to switch to a monthly subscription. Previously, customers could buy pay-as-you-go plans to get data on the cheap. When AT&T made this switch, they promised these pay-as-you-go customers could continue their data habit without paying extra.

Now, after a lengthy investigation, the FCC has found that AT&T was going back on their promise to their customers and forcibly switching them to these new plans. As punishment, AT&T must pay the FCC a fine of $70,000 as well as pay back the customers they wronged. These customers could receive up to $30 a month, depending on how much data they used and were charged for during this period.

“These strong FCC accountability measures will ensure customers are not over-charged. I am pleased that AT&T is taking the appropriate steps to resolve this issue.”

The FCC investigation found that Big Blue was forcing these customers over to new plans when customers made the smallest of changes to their accounts, such as replacing their phones through insurance or warranties, or even moving to a new residence. Though AT&T had claimed these users would be grandfathered in to these new plans, they forced them into the new plans without informing the customer.

In addition to paying a fee to the FCC and reimbursing their customers for switching their plans, AT&T has also agreed to a compliance plan. In this plan, AT&T will have to notify their customers of changes to their bill, as well as train their customer care representatives and send periodic reports to the FCC to show they are in compliance with these new measures. Additionally, AT&T will have to continue the FCC investigation on their own, searching their own records for customers which they may have forcibly switched to these new plans.

A spokesperson for AT&T tried to downplay the findings of the investigation, saying only a small percentage of customers were affected by these switches, and these customers had already received refunds as of November 2010.

“Based on a review of our refund process, we believe a vast majority of those customers affected by the billing error have already been made whole,” said Marty Richter, speaking to CNET.

This incident should send wireless subscribers to keep a close eye on their bill, said Michele Ellison, chief of the FCC´s enforcement bureau. AT&T customers especially should begin checking their bill to see if they´ve been wrongfully switched.